BUDGET

The congressional Republicans’ hostage strategy is pretty straightforward: Democrats are expected to offer a debt-reduction package that pleases GOP officials or Republicans will crash the economy on purpose. In the Dems’ latest effort to pay the ransom, they’ve offered to slice $2.4 trillion from the debt over the next decade — $2 trillion in cuts and $400 billion in increased revenue.

That five-to-one split — for every dollar in increased revenue, Democrats would cut about five dollars in spending — was deemed too liberal.

How big are the stakes on Capitol Hill right now? According to one of the most influential economists in federal policy making, the next four weeks will make the difference between a slow glide toward economic recovery, and a severe tumble into a new recession.

Moody’s chief economist, and former McCain economic adviser Mark Zandi is forecasting GDP growth of 4 percent by the end of the year and into next. But in response to a question from TPM, he told reporters at a breakfast meeting hosted by the Christian Science Monitor that his forecast would be “blown out of the water,” if Congress fails to “reasonably gracefully” raise the national borrowing limit.

Matt Yglesias: Negotiating advice for the President re: debt ceiling:

Think about it. There’s a significant chance that failing to raise the debt limit could provoke a renewed financial crisis — and Republicans would rather take that chance than allow a reduction in tax breaks on corporate jets.

What this says to me is that Obama cannot, must not, concede here. If he does, he’s signaling that the GOP can extract even the most outrageous demands; he’s setting himself up for endless blackmail. A line has to be drawn somewhere; it should have been drawn last fall; but to concede now would effectively mean the end of the presidency.

[…]To make that slightly more specific, the Republican position on the debt-ceiling deal is that there should be deep spending cuts in domestic discretionary programs, tremendous cuts to Medicare and Medicaid, and no tax increases or significant defense cuts. If Democrats don’t agree, then the next best alternative is for the minority party to induce a financial crisis. The Democratic position is that there should be deep spending cuts in domestic discretionary programs, some cuts to Medicare and Medicaid, some defense cuts, and tax increases that are about a fifth the size of the spending cuts. If the Republicans don’t agree, there should be further negotiations.

[…] Obama’s tactics are coming into clearer focus: they involve seeking higher taxes not on a broad swath of high income earners but on a narrower band of the super rich, such as owners of private jets. This means that those who earn $250,000 have got a reprieve.

The White House said Monday that the president is pushing the GOP to agree to eliminate some tax breaks and for businesses and loopholes for wealthier taxpayers, but is not trying to eliminate the across-the-board rates introduced by President Bush.

Obama still wants to scrap those rates, but with time running out on the debt-ceiling talks, he is making it clear Monday that he has a new range of targets.

“When we’re talking about the revenue that’s on the table, we’re not talking about the issue that the president’s put forward in his framework, and that is the Bush tax cuts and the tax cuts to the wealthiest Americans,” White House press secretary Jay Carney said Monday.

He said the White House is targeting tax breaks for oil and gas companies, which also go to other U.S. manufacturers, and tax breaks the White House says are provided to the owners of private jets.

“This is about subsidies for oil and gas companies — $40 billion — a loophole that allows for the owners of private corporate jets to benefit enormously in the billions, compared to, say, Delta or American Airlines, and other measures that benefit millionaires and billionaires, or in some way, you know, complicate our tax code in a way that it isn’t helpful,” Carney said.

Democrats for years have sought to eliminate the Bush tax rates for families with income more than $250,000, though Obama broke a campaign promise in December and agreed to extend those rates for two years.

While most didn’t expect the Bush tax rates to be included as part of a debt-ceiling deal, it’s significant the White House is publicly drawing the distinction.

It could also put more pressure on Republicans, who say tax increases should be off the table. […]

“On the issue of revenues, do we perpetuate a system that allows for subsidies in revenues for oil and gas, for example, or owners of corporate private jets, and then call for cuts in things like food safety or weather services, things that the federal government really does need to do on American citizens; or do we look at everything and we take a balanced approach?” Carney said. “We obviously believe a balanced approach is the right approach.”

Administration officials said the president has not changed his mind about the Bush tax cuts, but they are not the focus of talks to raise the debt ceiling.

Officials said there has been no shift in policy, and the administration sees a way to cut spending in the tax code by closing loopholes and ending subsidies.

BUSINESS

Here’s one financial figure some big U.S. companies would rather keep secret: how much more their chief executive makes than the typical worker.

Now a group backed by 81 major companies — including McDonald’s, Lowe’s, General Dynamics, American Airlines, IBM and General Mills — is lobbying against new rules that would force disclosure of that comparison.

The companies and their Republican allies in Congress call comparisons between the chief and everyone else in the company “useless.”

The secretive business havens of Cyprus and the Cayman Islands face a potent rival: Cheyenne, Wyoming.

At a single address in this sleepy city of 60,000 people, more than 2,000 companies are registered. The building, 2710 Thomes Avenue, isn’t a shimmering skyscraper filled with A-list corporations. It’s a 1,700-square-foot brick house with a manicured lawn, a few blocks from the State Capitol.

Neighbors say they see little activity there besides regular mail deliveries and a woman who steps outside for smoke breaks. Inside, however, the walls of the main room are covered floor to ceiling with numbered mailboxes labeled as corporate “suites.” A bulky copy machine sits in the kitchen. In the living room, a woman in a headset answers calls and sorts bushels of mail.

A Reuters investigation has found the house at 2710 Thomes Avenue serves as a little Cayman Island on the Great Plains. It is the headquarters for Wyoming Corporate Services, a business-incorporation specialist that establishes firms which can be used as “shell” companies, paper entities able to hide assets.

Wyoming Corporate Services will help clients create a company, and more: set up a bank account for it; add a lawyer as a corporate director to invoke attorney-client privilege; even appoint stand-in directors and officers as high as CEO. Among its offerings is a variety of shell known as a “shelf” company, which comes with years of regulatory filings behind it, lending a greater feeling of solidity.

“A corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy,” the company’s website boasts. “A person you control… yet cannot be held accountable for its actions. Imagine the possibilities!”

Among the entities registered at 2710 Thomes, Reuters found, is a shelf company sheltering real-estate assets controlled by a jailed former prime minister of Ukraine, according to allegations made by a political rival in a federal court in California.

The owner of another shelf company at the address was indicted in April for allegedly helping online-poker operators evade a U.S. ban on Internet gambling. The owner of two other firms there was banned from government contracting in January for selling counterfeit truck parts to the Pentagon.

ECONOMY

Most analysts say economic growth will perk up in the second half of the year. The reason is that the main causes of the slowdown — high oil prices and manufacturing delays because of the disaster in Japan — have started to fade.

“Some of the headwinds that caused us to slow are turning into tail winds,” said Mark Zandi, chief economist at Moody’s Analytics.

For an economy barely inching ahead two years after the Great Recession ended, the first half of 2011 can’t end soon enough. Severe storms and rising gasoline prices held growth in January, February and March to a glacial annual rate of 1.9 percent.

The current quarter isn’t shaping up much better. The average growth forecast of 38 top economists surveyed by The Associated Press is 2.3 percent.

The economy has to grow 3 percent a year just to hold the unemployment rate steady and keep up with population growth. And it has to average about 5 percent growth for a year to lower the unemployment rate by a full percentage point. It is 9.1 percent today.

As welcome as the stronger growth envisioned in the second half is, the improvement should be modest. For the final six months of the year, the AP economists forecast a growth rate of 3.2 percent.

So far this year, high gas and food prices have discouraged people from spending much on other things — from furniture and appliances to dinners out and vacations. That spending fuels economic growth.

And some U.S. auto factories had to suspend or trim production after the March earthquake in Japan interrupted supplies of parts and electronics. American dealerships have had fewer cars to sell.

The latest dose of glum news: The government reported Monday that consumer spending was about the same in May as in April, the first time in a year that spending hasn’t increased from the previous month.

The report confirmed the toll that high gas prices, Japan-related disruptions and high unemployment have taken on personal spending in the second quarter.

Relief is in sight, economists say. Oil prices have been falling since Memorial Day. The drop has lowered the price of regular unleaded gasoline by 23 cents in the past month, to a national average of $3.57 a gallon, according to AAA.

The timing of the drop in gas prices is especially fortunate because they usually rise during summer driving season, says Robert DiClemente, chief U.S. economist at Citigroup.

And the kinks in the global manufacturing chain are starting to be smoothed out as the Japanese factories that make cars and electronics resume production.

Diane Swonk, chief economist at Mesirow Financial, says auto sales should improve “quite substantially” later this year because the lost production from the earthquake is coming back faster than had been expected.

One sign of that rebound came when the Federal Reserve Bank of Chicago reported Monday that manufacturing in the Midwest rebounded in May after falling sharply in April.

And last week, the government said orders for machinery, computers, cars and other durable goods rose slightly in May after dropping in April. Economists attributed the turnaround, in part, to Japanese factories that started to rev up.

[…]The economists surveyed by AP predict unemployment will fall to 8.7 percent at year’s end. It is not exactly the start of a boom: The economy is still carrying too much baggage from the financial crisis — damaged banks, depressed home prices, debt-burdened consumers — to achieve much liftoff.

NPR:The Conference Board’s Consumer Confidence Index slipped to 58.5 in June, down from a revised 61.7 in May. Economists had expected the figure to edge up to 61. The results follow an almost six-point drop from May to April, which had marked a six-month low.

A reading of 90 indicates a healthy economy on the index, which measures how Americans feel about business conditions, the job market and the next six months. Economists carefully monitor consumer confidence because consumer spending accounts for 70 percent of economic activity.

“Consumers rated both current business and labor market conditions less favorably than in May, and fewer consumers than last month foresee conditions improving over the next six months,” said Lynn Franco, director of The Conference Board Consumer Research Center.

Consumers were less worried about inflation but they were more concerned about their income prospects, she said.

Now these Republicans want the American public to drink a giant glass of their Cut-Grow Kool-Aid. But the data actually show the opposite of their claims to be true: steep spending cuts are hampering economic recovery in some states, while other states that resisted cuts or increased spending are now seeing declining unemployment rates, faster private-sector job creation, and stronger economic growth.

[…] Steep state spending cuts have gone hand-in-hand with rising unemployment rates, falling private-sector payroll employment, and lower growth in state’s gross domestic product, or GDP — the sum of all goods and services produced by labor and equipment in each state, less imports.

Take private sector jobs, for example. This graph shows that state spending is not just about jobs for public service workers, but also has far reaching consequences for private businesses and their workers. The downward sloping red line shows the relationship between cuts to state spending and changes in private sector employment relative to the national average since the start of the Great Recession. States that cut spending are seeing significantly more job losses in the private sector than states maintaining or increasing spending levels. For every 10 percent cut in state spending, state economies lost 1.6 percent of their private-sector jobs.

ENVIRONMENT

The latest in a series of hijackings of chemical security legislation since 2001 took place at the June 22 mark up of H.R. 901 in Representative Peter King’s (R-N.Y.) Homeland Security Committee. It sounds crazy but King’s bill would extend current law until 2018 even though it prohibits the Department of Homeland Security (DHS) from requiring the use of safer more secure chemical processes to prevent chemical disasters in the event of an attack.

According to EPA data, 300 chemical plants together put 110 million Americans at risk. A poison gas release at one of them can threaten communities 20 miles down wind. Security can’t prevent an attack. Former DuPont CEO Charles Holliday admitted, “If someone wants to fly an airplane into a plant, it’s very hard to guard against it.”

The threat isn’t hypothetical. The Washington Post reported that the Lashkar terrorist organization that committed the 2008 attacks in Mumbai, India, asked a U.S. ally to “conduct surveillance of an unnamed chemical plant in Maryland.”

IMMIGRATION

Top White House officials made their case for the long-simmering immigration law, the DREAM Act, on Tuesday at a a Senate hearing packed with attendees, including Jose Antonio Vargas, a journalist who took the Internet by storm last week with a first-person account of working for major news outlets while an illegal immigrant. […]

With interest in the bill high across the political spectrum, observers and journalists crammed the hearing room as big guns, like Education Secretary Arne Duncan and Homeland Security Secretary Janet Napolitano made their case for the DREAM Act. […]

The bill would make it possible for people brought into the country as children to apply for citizenship after spending several years in the country and completing two years of college or military service. Senate Majority Leader Harry Reid (D-Nev.) reintroduced the bill in May.

But Republicans criticized the legislation, with Sen. John Cornyn (R-Texas) arguing Tuesday that the DREAM Act served only as a band-aid for a larger wound of a broken immigration system. He said he was frustrated “with the way this issue has been wielded as a political weapon.” […]

The legislation, first introduced in 2001 and reintroduced several times since then, had earlier received the support of some Republicans but has fallen short of passage. Most recently, late last year, Senate Democrats attempted to fold the act into a defense-spending bill, only to see it filibustered. An effort to pass the DREAM Act separately also failed.

Google received 14,201 requests from 25 countries for private user information in the second half of 2010, according to data released today in the company’s Transparency Report.

Among the countries listed in the report, the U.S. accounted for 4,601 requests, of which Google complied with 94 percent. The U.S. had the most requests of any single country.

Other countries high on the list included Brazil with 1,804 user data requests, India with 1,699, and the U.K. with 1,162.

The search giant’s Transparency Report is designed to shed light on the number of requests for user data that it receives from government entities, including law enforcement agencies. The report specifically cover requests for Google user account information. According to a Google FAQ, “we disclose only the information we believe we are legally required to share.”

The requests “primarily” are related to “criminal investigations,” Google noted. There are “likely a small number of requests that fall outside of this category. For example, we would include in the statistics an emergency request from a government public safety agency seeking information to save the life of a person who is in peril even though there is not necessarily a criminal investigation involved,” Google said.

The number of requests that Google gets for user information has risen each year, according to the company–a fact that it attributes to its growing array of products and services and an increase in its number of users.

Though Google complied with most of the requests from the U.S. as well as those from other countries,

Google received 14,201 requests from 25 countries for private user information in the second half of 2010, according to data released today in the company’s Transparency Report.

Among the countries listed in the report, the U.S. accounted for 4,601 requests, of which Google complied with 94 percent. The U.S. had the most requests of any single country.

Other countries high on the list included Brazil with 1,804 user data requests, India with 1,699, and the U.K. with 1,162.

The search giant’s Transparency Report is designed to shed light on the number of requests for user data that it receives from government entities, including law enforcement agencies. The report specifically cover requests for Google user account information. According to a Google FAQ, “we disclose only the information we believe we are legally required to share.”

The requests “primarily” are related to “criminal investigations,” Google noted. There are “likely a small number of requests that fall outside of this category. For example, we would include in the statistics an emergency request from a government public safety agency seeking information to save the life of a person who is in peril even though there is not necessarily a criminal investigation involved,” Google said.

The number of requests that Google gets for user information has risen each year, according to the company–a fact that it attributes to its growing array of products and services and an increase in its number of users.

Though Google complied with most of the requests from the U.S. as well as those from other countries, it did refuse a certain percentage. The company says reviews each request and sometimes will not provide the information or try to narrow the scope of the request.

GOP presidential candidate Rep. Michele Bachmann is now getting the Sarah Palin treatment on Wikipedia. In light of Bachmann’s latest historical hiccup, people are trying to edit John Quincy Adam’s Wikipedia page to reflect her recent gaffe. One edit, for example, changes his description from “John Adams was the sixth President of the United States” to “John Adams, a founding father, was the sixth President of the United States.”

POLITICS

Mitt Romney campaigned in Concord, N.H., talking to employees at the Lincoln Financial Group about his agenda. It was an odd choice of venues — Lincoln was a major beneficiary of the 2008 bank bailout, which Romney claims to have opposed.

Stranger still was the former governor’s choice in rhetoric. “The Obama Administration has not been able to deal with the number one issue the country was concerned about when he became president, the economy,” Romney said. “He did not cause the recession, but he made it worse.”

Again, what we’re seeing here are the limits of fact-checking — something we rediscover every cycle. Candidates, party committees and outside groups make false claims. Media fact-checkers go to work and debunk the claims. The candidates and groups go right on making them anyway. Reporters stop pointing out that they’re false.

No question, unemployment remains chronically high, and this is a major political problem for Obama, but has anyone asked Romney on the trail to justify his continuing assertion as outright fact that Obama made the recession “worse”? It has now become absolutely central to his campaign message, yet it’s finding its way into story after story and segment after segment with no rebuttal whatsoever.

Let me make this easy for Romney and the reporters who cover his campaign. It’s a surprisingly straightforward exercise, consisting of two short questions:

1. When Obama took office, the economy was shrinking. Now it’s growing. In what way is that “worse”?

2. When Obama took office, the economy was hemorrhaging jobs. Now it’s gaining jobs. In what way is that “worse”?

As best as I can tell, there are basically only three explanations. Romney is either lying and hoping no one will notice; he doesn’t know what “worse” means; or he considers a healthier economy worse than a deep recession.

Welcome to Detroit, Mitt Romney

In an op-ed in Tuesday’s Des Moines Register, Carey writes that Bachmann lacks the experience, savvy, and coordination to run the country. When he joined Bachmann’s team in 2010, he writes, her congressional office was a disaster, and his tenure working for the Minnesota Republican and tea party darling convinced him that she’s nowhere near the type of leader who can run the United States—not like former Minnesota governor Tim Pawlenty, whom Carey worked with while serving as chair of the Minnesota GOP:

Having seen [Bachmann and Pawlenty] up close and over a long period of time, it is clear to me that while Tim Pawlenty possesses the judgment, the demeanor, and the readiness to serve as president, Michele Bachmann decidedly does not.

The Bachmann campaign and congressional offices I inherited were wildly out of control. Stacks upon stacks of unopened contributions filled the campaign office while thousands of communications from citizens waited for an answer. If she is unable, or unwilling, to handle the basic duties of a campaign or congressional office, how could she possibly manage the magnitude of the presidency?

“This Boeing decision in South Carolina sent shockwaves across the nation and, if allowed to stand, will result in American job losses and I think you can be sure there will be some losses in Iowa as well as other states,” Romney said in an AP interview on Monday.

Only one problem: Alcoa told the AP their plant’s workforce is just fine:

Alcoa spokesman Mike Belwood said the labor board’s battle with Boeing over the South Carolina plant will not have an impact on employment at Alcoa’s eastern Iowa plants, which produce aluminum lithium plate used to make structural components of the Dreamliner.

McConnell summarized the Republican message for the election in 2012: Obama inherited a poor economy but made it worse. Given the Republicans’ threat to blow up the economy over the debt limit, their opposition to any sensible measure to boost the economy and put people to work, their efforts to gut even weak financial regulation, it is hard to avoid the conclusion that Republicans have moved from rooting for a bad economy to use in running against Obama to actively committing to making it worse.

“The man almost universally described as a weak front-runner is avoiding the press, raising money, and staying out of the spotlight — all of which provides no compelling storyline other than the recycled ones about Romney’s varied vulnerabilities and past flip-flops. And that suits his strategists just fine. They want to keep him out of the rough and tumble of the daily news cycle and focused on just one issue: fixing the economy. They firmly believe that nothing else will matter in 2012 — not Romney’s personality, not his Massachusetts health-care plan, not whether he is ill at ease with working-class voters.”

Tea Party groups that oppose the bill call it a bailout of failing schools. They accuse those who support it — who are backed by a powerful Washington group that has helped cultivate the Tea Party — of selling out to the kind of politics-as-usual approach that the movement was founded to oppose. Supporters say the opponents fail to understand that politics often means compromise.

The disagreement resonates beyond the local particulars. It offers a microcosm of the Tea Party’s struggle as it tries to turn the potency it showed in the midterm elections into influence in legislative battles and the 2012 presidential campaign. Having been brought together primarily by what they oppose, Tea Party groups have had difficulty agreeing on what they stand for. Just saying “Tea Party” strikes fear in many Republicans in Washington and state capitols. But in practice, the Tea Party is often fractious and undefined.

In Tennessee, a split between Tea Party groups forced legislators to scale back antiterrorism legislation that toughened state penalties for people who support terrorist groups. While the social conservatives in the movement supported it, those on the libertarian end of the Tea Party spectrum argued that the bill, originally aimed at Islamic groups, was a government intrusion on personal liberties.

In Indiana, Tea Party groups had vowed to unite behind a challenger to run against Senator Richard G. Lugar in the Republican primary in 2012, but soon fell to disagreement, with some groups refusing to attend a planned nominating convention.

And earlier this month, some Tea Party groups objected when Amy Kremer, the leader of the Tea Party Express, a group founded by longtime Republican consultants, told an interviewer that Tea Party supporters would fall in line behind whoever became the Republican nominee for president. […]

FreedomWorks is pushing anti-union legislation in several states, and saw the school choice legislation as part of that larger battle.

The proposed bill would give vouchers to students in failing schools who are poor enough to qualify for the federal free lunch program. The amount would vary according to how much money the state contributes to each district and would be expanded to a limited number of additional students in the second and third years of the program. It would cost an estimated $50 million in the first year, $100 million in the second and $1 billion in the third.

FreedomWorks hoped that having Ms. Puig and Ms. Przybylski’s support would give the bill grass-roots credibility.

But many Tea Party groups objected, saying that the bill violates the principles they have fought for, in particular, the libertarian tenet that the government cannot take property from one person against his will for the benefit of someone else. The bill, they argue, amounts to another government entitlement program.

“It creates class warfare,” said Sharon Cherubin, an activist in Lancaster County who home schools her children. “Is it fair that John Doe’s family earns a penny over poverty level and his parents have to sacrifice and work four jobs while the next guy gets a free ride?”

POLLS

A Washington Post-Pew Research Center poll released Monday found that a large plurality of Americans believe the pace of the troop drawdown, set to begin next month, is “about right.”

The 44 percent of respondents who said so outnumber by 3 to 1 those who believe the withdrawal schedule is too hasty.

In a prime-time address last week, Obama said he would pull 10,000 U.S. troops out of Afghanistan this year and another 23,000 by the end of next summer.

The withdrawal covers the 33,000 troops Obama ordered to Afghanistan at the end of months-long strategy review session in 2009.

By the time the drawdown is complete, 68,000 U.S. troops will remain in Afghanistan, where international forces have been fighting the Taliban for nearly a decade.

The last so-called surge forces will depart Afghanistan just two months before voters decide whether to give Obama a second term. A majority of the country, confronting severe economic and fiscal problems at home, no longer believes the war is worth fighting.

Underscoring the nation’s war-weariness, the new Post-Pew poll found that 29 percent of Americans believe Obama’s withdrawal schedule does not bring forces home fast enough. That is twice as many as those who worry that the drawdown is too fast — fears that Obama’s military commanders said they also had during discussions before the president made his announcement.

The poll found that Republicans continue to be the main supporters of the war, with 28 percent saying Obama’s plan will reduce forces too quickly. Only 5 percent of Democrats said the same thing.

But the results also pose a political challenge for Republican presidential hopefuls.

A similar proportion of Republicans – 32 percent – said Obama’s plan is not aggressive enough in bringing the troops home. The split within the party could make it hard for GOP candidates to find the right message on the war to win over primary voters.

Obama has been courting independent voters for months, and 40 percent of respondents who identified themselves as independents said his withdrawal plan is “about right.” Another 33 percent said the plan is not aggressive enough in reducing forces, with only 16 percent saying that the withdrawal schedule is too fast.

In a Pew poll conducted in late February, half the respondents said they expected Obama to set a troop withdrawal timeline that was “about right.” The new survey found that those expectations were largely met along party lines.

The Post-Pew telephone poll was conducted June 23 (the day after Obama’s troop withdrawal announcement) to June 26 among a random national sample of 1,005 adults. Results have a margin of sampling error of plus or minus 3.5 percentage points.

GOP efforts to sabotage the economy for political gain are not paying off – yet. But Republicans are reading the same polls and writing big checks. Karl Rove’s group just made a $20 million ad buy in crucial swing states (including Nevada). We have no margin for error in 2012. If they flip just 4 Democratic seats, we lose the Senate.

[…]61 percent of voters say they’re less likely to vote for Republicans in 2012 because of the budget that cuts funding to public schools but gives tax breaks to corporations.

Commissioned by the Perricone Group and Lambert, Edwards & Associates, the poll from June 16 and 17 surveyed 600 registered voters who said they would vote in the November 2012 general election.

“We’re seeing significant buyer’s remorse on the part of voters who elected Republicans into office,” said Chuck Perricone, CEO of the Perricone Group, in a statement. “While certainly there is time to right the ship before the 2012 elections, GOP leaders should take these results seriously – cutting public schools across the state is accompanied with consequences at the local level.”

The poll also asked about Michigan’s economic recovery and a number of candidates who will likely appear on the 2012 ballot.

On the economy, 51 percent disagreed with the statement that Michigan’s economy is starting to turn around while 41.2 percent agreed. Younger voters aged 18-34 were more likely at 51 percent to believe the economy was turning the corner while 54 percent aged 50-64 disagreed.

Buried in the latest McClatchy/Marist poll was an interesting nugget. Although Americans are upset about the economy, 61% of those polled still think that Obama inherited the recession.

According to the poll Obama only has a 37% approval rating on his handling of the economy. He scores even worse on the issue of the deficit with a 61% disapproval rating, but his favorable rating remains at 50%, and when asked if the economy is his fault, or he inherited it, 61% of those polled expressed the belief that the president inherited the economy.

While the first two numbers should give the Obama campaign cause for concern and the second number will be the likely reason why any deal to raise the debt ceiling will also involve spending cuts, it is the last two numbers above that pose the biggest problem for Republicans ahead of 2012.

We’ve never found her leading one of our state polls until now but Michele Bachmann’s been on fire for the last two weeks and we find her at the top of the GOP field in both Oregon and Montana when Sarah Palin’s not included. That’s just more indication that if Palin ends up not running Bachmann will pretty instantaneously vault to co-front runner status with Mitt Romney, provided she can continue her current momentum.

In Oregon Bachmann gets 29% to 28% for Romney, 10% for Ron Paul, 9% for Newt Gingrich, 7% for Herman Cain, 6% for Tim Pawlenty, and 2% for Jon Huntsman. In Montana she leads with 25% to 22% for Romney, 11% for Gingrich, 10% for Paul, 9% for Pawlenty,8% for Cain, and 4% for Huntsman.

In both states Bachmann’s support is built on strong support from the far right. In Oregon moderates prefer Romney over her by a 39-15 margin and ‘somewhat conservatives’ ones favor him by a 29-22 margin as well. But with ‘very conservative’ voters, which constitute the largest share of the primary electorate at 44%, Bachmann leads 37-26 and that fuels her small overall lead. It’s a similar story in Montana. Romney leads 21-13 with moderates and 26-22 with ‘somewhat conservative’ voters. But Bachmann is up 34-19 with ‘very conservative’ voters and with their constituting 39% of Republican voters that gives her the upper hand overall.

Obviously this is just two states but these numbers speak to the possibility for a two way race between Romney and Bachmann if Palin stays out of the field. They’re 11 points clear of anyone else in Montana and 18 points ahead of anyone else in Oregon. Herman Cain’s momentum appears to have stalled after a tremendous May and early June, Pawlenty and Huntsman still haven’t gotten off the ground, Gingrich doesn’t appear likely ever to return to his former level of support, and Paul, well, he’s probably stuck around 10% in perpetuity.

Oregon provides a good example of why Romney should probably want Palin to run, in order to split up the vote of the far right. With Palin included there he gets 28% to 18% for Bachmann, 16% for Palin, 9% for Paul, 8% for Cain, 6% for Gingrich and Pawlenty, and 0% for Huntsman. Without Palin included Bachmann picks up 11 points with Romney staying right in place. There’s an argument that Palin’s entry is the best possible thing that could happen to Romney’s prospects over the next few months.

In Montana Palin actually leads when she’s included with 20% t0 18% for Bachmann, 17% for Romney, 9% for Gingrich and Paul, 8% for Cain, 7% for Pawlenty, and 4% for Huntsman. In both Montana and Oregon Palin has easily the best net favorability of any of the GOP contenders…she’ll be a force if she runs…it’s just a very big if.

SCOTUS

The U.S. Supreme Court capped its nine-month term with a show of support for free speech.

Whether the topic was violent video games, pharmaceutical marketing campaigns or political contributions, the justices cast a skeptical eye toward government regulation of speech as they closed out their year with a flurry of First Amendment rulings.

The court yesterday struck down a California law barring the sale of violent video games to children, and voided an Arizona system that provided public funds to political candidates based on their opponents’ financial resources. Last week the court overturned a Vermont law aimed at limiting the ability of brand-name drugmakers to tailor their sales pitches to doctors.

“I wouldn’t say that the court’s track record on speech is absolutely perfect, but it’s pretty close to that,” said Steve Simpson of the Institute for Justice, an Arlington, Virginia, group that successfully challenged the Arizona system. The court has “really protected speech where it’s mattered the most, even though in some cases it’s clearly wanted to allow the government a certain amount of room to navigate.”

Each ruling divided the court, with dissenting justices lamenting the limits the majority placed on the government’s ability to address societal issues. In the campaign finance case, Justice Elena Kagan said the disputed law could promote speech, not restrict it, by preventing money from corrupting politics.

‘Will of the People’

The invalidated law “fostered both the vigorous competition of ideas and its ultimate object — a government responsive to the will of the people,” Kagan wrote.

Two of the rulings fractured the court at or near its ideological fault line. In the 5-4 campaign finance decision, the court’s five Republican appointees — Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito — formed the majority.

In the drug case, Justice Sonia Sotomayor joined that group in a 6-3 decision to strike down the Vermont law limiting the use of data on the prescription writing practices of doctors. The measure targeted “detailing,” the brand-name drug industry practice of making one-on-one sales pitches to doctors, and was aimed at encouraging the use of lower cost generic drugs.

In both cases, the majority said the state was improperly attempting to penalize one side of a public policy debate.

“The state may not burden the speech of others in order to tilt public debate in a preferred direction,” Kennedy wrote for the majority in the drug case. Bloomberg LP, the parent of Bloomberg News, was among several news organizations that urged the court to overturn the Vermont law.

Funeral Protest

The splits in those cases fueled assertions that the court’s ardor for free speech depends on what is being said and who is speaking. Supreme Court rulings in recent years have limited the speech rights of students, public employees and human rights activists, said Adam Winkler, a constitutional law professor at the University of California at Los Angeles.

The court said in March that it will protect even unpopular and offensive speech. Voting 8-1 with Alito as the lone dissenter, the justices struck down a $5 million award against a group that staged an anti-homosexual demonstration at a military funeral.

‘Great Pain’

The protesters, from the Westboro Baptist Church in Topeka, Kansas, bore signs that said God was killing U.S. soldiers to punish the country for accepting homosexuality. Writing for the court, Roberts said the protesters had inflicted “great pain” on the father of a Marine who died in Iraq.

“On the facts before us, we cannot react to that pain by punishing the speaker,” Roberts wrote. “As a nation we have chosen a different course — to protect even hurtful speech on public issues to ensure that we do not stifle public debate.”

The video game case produced an unusual alignment, with Scalia, Kennedy, Sotomayor, Kagan and Ruth Bader Ginsburg taking the staunchest free-speech positions. Those five rejected the state’s contention that violent games are akin to sexual materials, which the government can restrict to protect children.

Roberts and Alito agreed with the result, while saying they would have left room for states to enact better-crafted laws. Thomas and Stephen Breyer dissented.

Regulatory Power

Breyer, perhaps the court’s strongest advocate for the regulatory power of government, also voted to uphold the Vermont drug law and the Arizona campaign finance measure.

The justices may extend the First Amendment further in the term that will start in October. The court yesterday said it will decide whether federal regulators violate the speech rights of broadcasters by imposing fines for on-air profanities and nudity.

“This court is the strongest First Amendment court in history,” said Burt Neuborne, a New York University School of Law professor who specializes in civil liberties and filed a brief backing the Arizona public financing law. “The current majority uses the First Amendment as a powerful tool of deregulation that eliminates virtually all government efforts to regulate anything to do with the flow of information.”

That said, the Court hasn’t placed a complete lid on public financing. This was a narrow ruling that struck down a particular “trigger” provision that gave candidates extra funds to match a high-spending opponent. As the Campaign Finance Institute points out, the Court “left the door wide open for other forms of public financing.” The Fair Elections Now Act, which provides block grants for candidates who qualify through small donations, is still legal under the Supreme Court’s ruling, as is the current system for publicly financing presidential campaigns. And on a smaller scale, the New York City system, which matches small donor contributions with public funds, remain completely legal.

AND IN OTHER NEWS…

The Economist reports that city dwellers are at a significantly increased risk of developing anxiety and mood disorders. Evidence from a new study by Andreas Meyer-Lindenberg, a German psychologist, might explain why.

Urbanites, it turns out, deal with stress differently than rural residents. Meyer-Lindenberg identified a difference in the activity of the amygdalas, with those living in cities having the highest activity in this area of the brain. The amygdala is responsible for memory storage and emotional events, and scientists believe it’s also related to dealing with fear. Meyer-Lindenberg also found that people raised in cities have an off-kilter perigenual anterior cingulate cortex (pACC) amygdala link, a condition also present in schizophrenia.

The biggest court to date including one Republican nominee who is a Scalia protege upholds the ACA. There is much talk Scalia not Kennedy may be swing vote because of his his history of adhering to commerce clause laws.

Cher great roundup per usual. I always thought the tax case would be much easier to sell if you drew the line at the real rich instead of the $250K plateau. If I was dictator I would raise taxes a little on those making say $250K-$1MM and then soak those with pre-Reagan like tax rates for those making over a million. Keep in mind I don’t think it could happen in one step but the goal of adding a real rich tax bracket is beyond it’s time.

The other no brainer is raising the ridiculously low payroll tax ceiling from a little over $100K to $250K then again add a rich bracket above 51MM.

Here are some other things that nine year old John Quincy Adams did to ensure our country would be great decades later:

He built a hangar in Kitty Hawk, North Carolina, so the Wright Brothers would have a place to store the plane he correctly predicted they would invent.

He placed the ‘H’, ‘O’, and ‘L’ signs up on the hill above Los Angeles. Long before the area was even given the name “Hollywood”, those three letters served as a beacon for budding entertainers and would-be directors.

A precocious musician, he created the world’s first jazz composition, for clavichord, entitled “Rhapsody in Red, White and Blue”. This was said to have inspired his instructor, Betsy Ross, to use those colors in her flag design for the new nation.

He coined the phrase, “fast food” to describe the quickly gobbled and digested ham sandwiches he developed as rations for the Minute Men.

Those are some VERY scary ventriloquist’s dummies, Cher! But let’s face it, they seem to go out of their way to make even the regular ones scary looking. I had a couple when I was a kid that I finally had to put in the basement because I dreaded the thought of passing them on my way to the bathroom in the middle of the night. I was just about sure one of them would start talking on its own at some point.

Whts, aren’t they though! I don’t really understand it, but I have a penchant for scary things--dolls, clowns, masks, and of course the dummies are perhaps the creepiest. I collect some of them. And some I don’t consider particularly scary--like puppets from around the world. I used to have them hung in our den. It wasn’t until my son was a teenager that he told me that, like you, he used to have to run past them for years. He never told me they creeped him out. Kind of like this, but mine had glass eyes--maybe that was what freaked him. Or maybe it was so many hanging together. That seems worse.
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Same thing. It was really embarrassing for me to finally confess to my mom how scared I was. I still remember how calmly she took the whole thing. “Well, if they scare you just put ’em in the basement!”

I think I grew up a bit that day, realizing how different a child’s view of the world is from an adult’s.